The stock markets are generally steady as markets are going to end a volatile week. Asian indices are bounded in tight range today so far with Nikkei down -0.2% at the time of writing. China's Shanghai composite is mildly up by 0.5% but is held below 4000 handle. That followed another day of nearly flat close in US overnight. DJIA rose 0.03% at 17408.34 while S&P 500 dropped -0.13% at 2083.39. Nonetheless, crude oil extended recent down trend and slid to 6.5 year low, breaching 42 handle. In the currency markets, New Zealand dollar is suffering some renewed selling pressure after weaker than expected retail sales data. Aussie closely followed for its close tie with China. Canadian dollar is under some mild pressure on crude oil's weakness while dollar is mixed. Euro, on the other hand, is so far the strongest major currency this week.
China's PBoC finally raised the value of yuan against dollar by a mere 0.05% today, ending three straight days of sharp devaluation. The daily reference rate was set at 6.3975 per dollar, even slightly stronger than yesterday's close of 6.3982. PBoC tried to calm the markets again as assistant governor Zhang Xiaohui said that "currently, there is no basis for renminbi exchange rate to continue to depreciate". Meanwhile, its economist Ma Jun also noted that "the central bank, if necessary, is fully capable of stabilizing the exchange rate through direct intervention in the foreign exchange market."
According to a Reuters poll, economists put a 50% chance of rate hike by Fed in September and 85% chance by year-end. Also, a median 55% was given that Fed would hike twice this year. Meanwhile, according to a WSJ poll, 82% of economists surveyed expected Fed to hike in September while 13% said Fed would wait till December. China's yuan devaluation was seen by some economists as a reason for Fed to postpone the first hike. But some economists noted that would only make September decision a closer all rather than change it. And, a significantly stronger dollar against Asian currencies is needed to make fundamental change in the outlook.
On the data front, New Zealand retail sales rose 0.1% qoq in Q2, much lower than expectation of 0.5% qoq. GDP from Eurozone will be the main focus in European session while Eurozone will also release July CPI final. UK will release construction output. From US, PPI, industrial production and U of Michigan consumer sentiment will be featured.